FOREX
Dollar to crash further as NNPCL secures AFREXIM $3bn facility
Indications are that the dollar might crash further as the Nigerian National Petroleum Company Limited has secured a $3 billion facility to enable the Federal Government to stabilize the foreign exchange market.
The $3 billion facility us also to immediately boost the value of the naira against the dollar.
The Nigerian National Petroleum Company Limited sealed the facility on Wednesday from the African Export-Import Bank to ease pressure on the naira.
The loan would enable NNPCL defray taxes and royalties in advance and provide the Government dollar liquidity to stabilize the Naira.
The Federal Government will disburse the loan in tranches based on requirements.
This will be appreciable in boosting the value of the Naira which will translate to lower cost of fuel and further stem the increase in the cost of petrol.
A stronger Naira will mean lower prices against current level and there would be no need for subsidy as fuel can be purchased easily and allow the government to pursue its deregulation policy in line with the implementation of the Petroleum Industry Act 2021.
At deal which was sealed in Cairo, Egypt, both parties jointly signed a commitment letter and Termsheet for the emergency loan of $3bn.
This transaction will provide some immediate disbursement that will help NNPCL support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.
The move is expected to boost foreign exchange liquidity into the country and will further drive down the exchange rate between the naira and the dollar.
This is the fourth transaction being consummated between NNPCL and AFREXIM Bank over the last 3 years and goes to further consolidate the mutual relationship between the two entities.
Both Nigeria and NNPCL are shareholders in AFREXIM Bank, with sole purpose of enhancing investments and growing prosperity in Africa.
The agreement for the loan which was sealed on Wednesday in Cairo, saw the Group Chief Executive Officer of NNPC Ltd, Mallam signing for the National Oil Company while Dr George Elimbi, Executive Vice President Afreximbank signed for the bank.
GCEO NNPC Ltd, Mr. Mele Kolo Kyari and Executive Vice President, AFREXIMBANK, Mr. George Elimbi signing the agreement on behalf of their Respective Organisations
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